1. How much per cent above the cost price should a shopkeeper mark his goods so that after allowing a discount of 20% on the marked price, he gains 12%?

40%

Problems like these are sometimes hard to translate to equations, so sometimes I like to pick an easy number...so for this, say the cost is $1. If the cost is $1, the shopkeeper's goal is to receive $1.12 after giving a 20% discount on a marked up price...well, $1.12 is 80% of what (1.12 = .8x ...x=what)? $1.40...is how much percent more than $1? I picked 1 because it is easy to see where the percents are coming from.

2. Ricky marks his goods at 40% above the cost price but allows a discount of 5% for cash payment to his customers. What actual profit does he make, if he receives $1064 after allowing the discount?

Thanks mate for the explanation but to be honest I couldn't understand the explanation you have given for the 2nd problem though I could understand the 1st problem. Can you please simplify the explanation of the 2nd problem?